Prime minister Benjamin Netanyahu clinches deal to form new Israeli government
* Coalition-building deadline was due to expire at 2100 GMT
* Netanyahu won last-minute support of far-right party
* New government will have 61 of parliament's 120 seats
Prime Minister Benjamin Netanyahu clinched a deal to form a new government just before a deadline expired, but his coalition will rule by the slimmest of majorities in Israel's turbulent parliament.
"Israel now has a government," Naftali Bennett, the head of the far-right Jewish Home party announced at parliament after hours of haggling with Netanyahu's Likud deputies over cabinet positions, which were not immediately announced.
Netanyahu had struggled to put together a coalition for nearly two months after winning an easy election victory, after a former ally abandoned him this week.
Barely two hours before a midnight (2100 GMT) deadline mandated by law, Netanyahu's right-wing Likud sealed an agreement with ultranationalist Jewish Home, which advocates annexation of parts of occupied territory Palestinians seek for a state.
Netanyahu dispatched a formal notice to President Reuven Rivlin, telling him "I am honored to notify you I have succeeded in forming a government, which I would like to present to parliament as soon as possible."
With Jewish Home, the ultra-Orthodox United Torah Judaism and Shas parties and Kulanu, a centrist faction, the Likud-led government will control 61 of parliament's 120 seats.
VULNERABLE TO POLICY DEMANDS
Such a narrow majority will make Netanyahu vulnerable to policy demands from even his most junior partners, continuing a long tradition of instability in Israeli politics.
Netanyahu said he would seek to enlarge the coalition. "Sixty-one is a good number, 61-plus is better," he said, without elaborating as to which party he would seek to add.
Jewish Home seems certain to push for the expansion of Jewish settlement in occupied territory, a policy that could deepen Israel's rift over the issue with its main ally, the United States, and the European Union.
Bennett, the party's leader, has called for the annexation of parts of the West Bank. That goes beyond Netanyahu's pledge to continue to build in settlements only in areas Israel intends to keep in any future peace deal with the Palestinians.
In return for Jewish Home's support, Netanyahu bowed to its demand for the justice minister portfolio, a post critical to the smooth passage of cabinet-approved legislation to parliament for ratification.
Under a compromise, some of the minister's authority may be curbed, Israeli political sources said. The exact job definition was likely to be ironed out only in talks expected to take place overnight until the agreement between the parties is signed.